January 24, 2023
The New York Times recently published an article where Associate Professor of Markets, Public Policy, & Law, Rena Conti discussed the challenges governments and insurers face due to due to staggering medication costs for drugs like Zolgensma.
“If benefits of these therapies are immediate in terms of health but the potential savings happen in the future, that math may not work for them.”
As a one-time injection, Zolgensma is one of the first in a new class of cutting-edge gene therapies, which offer enormous promise at high prices for those with terminal or debilitating illnesses. Many of the richest countries cover the drug thanks to deals negotiated by its maker, the pharmaceutical company Novartis. In middle-income countries like Brazil, where public health systems are often fragile and underfunded, the company is now trying to expand its coverage. Despite the fact that Zolgensma’s 2019 list price in the U.S. was the highest ever at $2.1 million, it has been surpassed four times since then, and there are many more new treatments expected to be as costly. Even though these long-awaited treatments will be able to treat a number of life-threatening and fatal conditions, their prices aren’t sustainable – countries aren’t going to be able to afford them.
In contrast to other industry pricing decisions, gene therapy prices have largely avoided criticism. Conti elaborates on this by stating that for middle-income countries, “if benefits of these therapies are immediate in terms of health but the potential savings happen in the future, that math may not work for them.” A government agreement with Novartis stipulates that each treatment will be paid for in five equal amounts over four years. The government will not be obligated to pay for the subsequent payments if the patient dies, requires permanent ventilation, or loses certain motor functions two years after receiving Zolgensma.
